Optus equipment sales tumble blamed on smartphone launch cycles

Optus equipment sales tumble blamed on smartphone launch cycles

Singtel saw equipment sales decline by 14 per cent in the quarter

Optus and its Singaporean parent company, Singtel, have blamed a dip in equipment sales in the three months ending September on the smartphone launch cycle landscape.

“In Australia, Optus delivered strong mobile, particularly in branded postpaid, and NBN customer growth,” Singtel told investors in its latest quarterly financial report. “Continued customer growth and lower expenses lifted EBITDA [earnings before interest, tax, depreciation and amortisation] by five per cent despite higher content costs and credits from device repayment plans.

“However, revenue dipped one per cent mainly due to lower equipment sales as customers held out for anticipated smartphone launches as well as adopted more handset leasing plans,” it said.

Across its group of companies, Singtel saw equipment sales decline by 14 per cent, year-on-year, during the quarter, in both Singapore and Australia, mainly due to the timing of smartphone launches, and an increase in uptake of handset leasing plans in Australia, according to the company.

However, Optus saw its mobile service revenue increased by two per cent, with the addition of over 69,000 postpaid handset customers during the period.

Broadly, Optus’ net profit for the three month period came to $175 million, a 4.4 per cent decrease from the $184 million it reported for the same period last year.

Meanwhile, the company’s information and communications technology (ICT) and managed services revenue grew by 15 per cent in the three months ending September, compared to the same period the year prior.

The company’s operating revenue was stable year-on-year at $2.1 billion with growth in mobile, mass market fixed and ICT and managed service revenues offset by the lower equipment revenue.

Overall the telco’s ICT and managed services revenue was up by 15 per cent, to $187 million for the period, due to a number of key contract wins.

For Optus’ parent company, Singtel, Revenue from ICT grew 14 per cent, mainly from cyber security and provision of infrastructure services in Singapore as well as the key contract wins in Australia.

In August, Optus Business revealed it had won a $13.6 million contract extension with the Department of Agriculture and Water Resources for the provision of managed IT services.

The deal also sees Optus provide managed telephony, video conferencing, unified communications and a contact-centre solution to support collaboration across the Department’s 150 sites across Australia.

During the quarter, Optus also saw its staff headcount drop from 8,896 at the end of the September quarter in 2016 to 8,278 at the end of the same period this year. At the end of June, the company claimed a headcount of 8,475, almost 200 people more than its tally as at the end of September.

In October, it emerged that Optus was set to make around 170 jobs redundant after moving to outsource the functions of its network management centre (NMC) to Nokia.

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Tags NBNTelcoit servicesoptusSingtel Optus


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